On Monday, gold hovered near $1,640 an ounce after data demonstrated stabilizing factory activity in China. Investors stay focused on a U.S. Federal Reserve policy meeting that will take place later in the week for measuring the health of the world's largest economy.

Gold fell 1 percent last week as fears resurfaced about the debt crisis of Spain. Spot gold was little changed at $1,642.04 an ounce by 0311 GMT and U.S. gold traded nearly flat at $1,643.20.

"Gold doesn't seem to be trading on anything other than externally derived sentiment," said Nick Trevethan, senior commodity strategist at ANZ in Singapore.

"There is still pressure for gold prices. The market has been trying to push the support level at $1,630-$1,640, although the push is rather half-hearted right now."

In the week ended April 17, money managers raised their net long positions in U.S. gold futures and options to 112,275 contracts, from 109,511 contracts a week earlier, which is its lowest in more than three years.

Gold traders in the world's top gold consumer, India, stayed away from gold purchases despite the upcoming Akshaya Tritiya festival as Indian currency weakness has made imported bullion more expensive.